Firm must pay $4.5 million to exploited teachers in precedent-setting SPLC case

A jury ordered a labor recruiting firm and its owner Monday to pay $4.5 million to 350 Filipino teachers they lured to teach in Louisiana public schools and forced into exploitive contracts after arriving in the United States through the federal guestworker program.

Universal Placement International of Los Angeles and its owner and president, Lourdes Navarro, were ordered to pay the damages following a two-week trial in the U.S. District Court for the Central District of California in Los Angeles.

“The jury sent a clear message that exploitive and abusive business practices involving federal guestworkers will not be tolerated,” said SPLC Legal Director Mary Bauer. “This decision puts unscrupulous recruitment agencies on notice that human beings – regardless of citizenship status – cannot be forced into contracts that require them to pay illegal fees.”

The verdict came in a federal class action lawsuit, Nunag Tanedo v. East Baton Rouge Parish School Board, brought on behalf of the teachers in August 2010. The teachers are represented by the SPLC, the American Federation of Teachers (AFT) and the law firm of Covington & Burling LLP.

The teachers began arriving in the United States in 2007 as part of the H-1B guestworker program administered by the U.S. Department of Labor. H-1B visas permit foreign nationals with special skills to work in the United States for up to six years. Most teachers paid the placement service about $16,000 – several times the average household income in the Philippines – to obtain their jobs.

Nearly all the teachers had to borrow money to pay the recruiting fees. The recruiters referred the teachers to private lenders who charged 3 to 5 percent interest per month. Teachers were forced to pay these exorbitant fees because they had already made substantial investments that would not be returned. The recruiters confiscated their passports and visas until they paid.

“This groundbreaking verdict affirms the principle that all teachers working in our public schools must be treated fairly, regardless of what country they may come from,” said AFT President Randi Weingarten. “The outrageous abuses provide dramatic examples of the extreme exploitation that can occur, even here in the United States, when there is no proper oversight of the professional recruitment industry. The practices involved in this case – labor contracts signed under duress and other arrangements reminiscent of indentured servitude – are things that should have no place in 21st-century America.”

In addition to paying upfront fees, the teachers were forced to sign away an additional 10 percent of the salaries they would earn during their second year of teaching. Teachers who resisted signing the contracts were threatened with being sent home and losing the thousands of dollars they had already paid. The court declared those contracts illegal and unenforceable. “We are very pleased with the verdict in this case and proud to have stood by these brave teachers as they finally obtained justice,” said Dennis Auerbach, lead attorney on the case from Covington and Burling.